Morrison (wm) Supermarkets Share Discussion Threads

[nerdlinger] 04/7/2021 15:07

Might be a good strategy for Morries (ignoring takeovers):

[fletcher270] 04/7/2021 13:37

Rumours Apollo will bid don't trust them I had William Hill when Caesar bid Apollo were just messing

[leadersoffice] 04/7/2021 12:05

2.54? You must be joking ..,, no way will I vote for that. I expect a higher offer.

[tygwyg] 04/7/2021 10:06

Bizarre to think any numbers in the public domain are anything other than a mix of pr candy and balls of the curvy variety.

[tygwyg] 04/7/2021 09:57

Expectation management ops in full swing

[chinese investor] 04/7/2021 09:37

No reason why they should be frozen.

[mr bennn] 04/7/2021 09:35

Can somebody just confirm if the Morrisions shares will still be trading on the ftse tomorrow please, as we hold a Morissons sharesave account ? Or are they now frozen ? Thanks.

[wrestlingmad] 04/7/2021 08:35

Rival buyout firms are preparing for a potential bidding war.

The Sunday Telegraph understands that Apollo Global Management, another American private equity player, has hired Morgan Stanley and is weighing an offer of its own.

[inv] 03/7/2021 23:52

Further bid coming
Monday at 275p

[pjleeds] 03/7/2021 22:36

Full stop.X

[pjleeds] 03/7/2021 22:02

The govt. is corrupt.x

[loganair] 03/7/2021 21:58

Morrison hasn’t yet spoken to the government about the Fortress deal but intends to start the process now, a person familiar said.


HSBC and RBC Capital are advising Fortress and also providing debt funding for the deal. Fortress’ other retail and petrol forecourt investments include Albertsons, Circle K and Fresh & Easy in the US, and Majestic wine stores in the UK. The firm said it intends for Morrison to continue to operate as a standalone business with its head office remaining in Bradford, and led by its current management team.

[igoe104] 03/7/2021 21:01

Its coming home...

[hades1] 03/7/2021 20:53

Likely new bid from Apollo and further bid from CD&R both being considered - Both being reported tonight.
Hotting up!

[hillfoot7] 03/7/2021 20:32

Not at all worked for the company for 35 years we became more successful every year from a small Yorkshire family owned base not a bad end result market stall to 6.5 billion in 50 years thanks Ken

[squeamish1] 03/7/2021 19:52

If you listen carefully you will hear the sound of Sir Ken spinning in his grave

[loganair] 03/7/2021 18:22

Shareholders ultimately decide, and the views of long standing investors Silchester, with a 15% stake, and Columbia Threadneedle, with 9.5%, will be critical. Neither has hinted yet at where it sees fair value.

[nerdlinger] 03/7/2021 18:18

If this stretches out 8 weeks or so, 1st September, MRW will be back in the FTSE 100. Probably.

[loganair] 03/7/2021 18:12

Protection vs plundering - why Morrisons is backing the Fortress bid:

It’s not about the price. The 254p Fortress cash offer for Morrisons, announced today and recommended by the Morrisons board, is only 8% more than the 235p bid tabled by US private equity giants Clayton Dubillier & Rice last month. And of course, CD&R may yet up its offer, as indeed may others, to take the hostilities further.

But the significance of the Morrisons board’s acceptance of a takeover by Fortress is in “the fulsome set of commitments in its intention statement”, as chief commercial officer Trevor Strain put it in a call to me this morning, “not just to investors but to all its stakeholders including colleagues, suppliers, farmers and pension holders”.

So who are Fortress? What does their offer entail? What commitments has Fortress made to its stewardship of Morrisons? And how can we be sure they won’t renege on them?
Serious owners

In contrast with CD&R, Fortress is a global asset management fund, with over £53bn in global assets managed on behalf of 1,800 institutional clients and private investors. And the investment of “in excess of £3bn” in equity capital in the all-cash offer “underpins them as serious owners”, says Potts.

The implicit contrast Potts draws with CD&R’s bid is stark. With lower debt levels to service, Fortress “does not anticipate engaging in any sale and leaseback”, it promises. It’s also “fully supportive” of the recent increase in the hourly rate of pay to £10 an hour for store colleagues – “the highest in the market,” adds Potts, proudly, in recognition of their valiant contribution in the pandemic, while there’s also no plans to change the pension rights and benefits.

In other words Fortress, rather than saddling Morrisons with debt, and engaging in the speedy financial flips that private equity is famed for, is positioning itself as a ’patient capital’ player, focused on protecting and nurturing rather than plundering and asset stripping.

As Fortress managing partner Joshua A Pack said: “We believe in making long-term investments focused on providing strong management teams with the necessary flexibility and support to execute their strategy in a sustainable and value enhancing manner.”

As evidence Fortress can point to its 19-year track record in supporting grocery retail businesses including the likes of Albertsons, Fresh & Easy and A&P in the US, as well as US-based petrol forecourt and convenience operator United Pacific in 2013, which has since increased from 129 stores to 650.

Its approach to UK-based Majestic Wine, acquired in late 2019, is also instructive, it argues: it’s not sold any of its freehold and long leasehold properties, and it reversed planned job cuts and store closures in the UK (albeit conditions are more favourable since the pandemic due to Majestic’s status as an ‘essentialR17; retailer).

In contrast with private equity players, there’s also no intention to bring in a separate operating team. “They aren’t there to operate the business,” says Potts. “They are backing the existing management, the strategy, the people”.

Indeed Fortress was glowing in its praise for Potts & co: “Whether it is grocery delivery, hiring new staff to help pick and pack customer orders or integrated vertical sourcing of products, Morrisons management has taken steps to be at the forefront of these trends rather than trailing them.”

True, there are questions over the long-term commitment of Potts, 64 and chairman Andy Higginson, 63. But the offer provides explicit support for the management team’s strategy in every way: in terms of its customers (“a central part in the fundamental character of the Morrisons business”); its suppliers (anticipating “no material changes to existing payment practices”); its vertically integrated supply chain; its programme of targeted new store openings (combined with online sales growth); its focus on wholesale channel development; its support for carbon reduction plans and other sustainability measures.

There’s also no plans to move the Bradford HQ.
Good stewards

Nor is this a case of Morrisons desperately seeking out a more friendly backer following the CD&R approach in mid June. On the contrary, talks with Fortress have been ongoing since 4 May, when an initial 220p per share bid was made. And Fortress has dedicated “significant resources to developing a through understanding of Morrisons’s positioning and long-term potential”.

That was backed up by Pack’s promise of playing a benevolent role, to be “good stewards of Morrisons, to best serve its stakeholder groups, and the wider British public, for the long term.”

As to the possibility of Fortress backtracking on its commitments, says Potts, “we’ve been talking to them for several weeks and have no reasons not to trust them”.

Indeed changes to the UK Takeover Code that were made in the wake of Kraft’s acquisition of Cadbury in 2011, adds Strain, mean that “the intentions document of an acquirer has a legally binding effect. If you look at those intentions there’s a very specific commitment to colleagues, pension holders, it’s a fulsome set of intentions that are binding. That regulatory framework is clear and understood.”

So what happens next? In the next 28 days a scheme document will outline further details of the offer, which would then need to be approved by shareholders “over the summer”, Potts advises.

Meanwhile, it’s not inconceivable that both CD&R and other private equity players may up the stakes and table higher bids. But Potts stresses that it’s not just a case of the highest price taking the spoils.

“The underpin on the pension, anticipating no material change in leaseback obligations, the fact our terms and conditions aren’t changing, bearing in mind the £10/hour commitment, these are all important considerations. Boards have a responsibility to both the price achieved in any acquisition and the implications for a wider set of stakeholders than just investors. We have given extensive consideration to this bid prior to recommending it.

“Any rival bid would have to address those competitive positions. All of us in the board have a very important responsibility to assess future owners of Morrisons. That combination of the premium and the intention and scale of the equity versus debt will have to be compared with other investment alternatives by us and by the companies themselves as they go through their own process.”

That backing puts Fortress firmly in the driving seat. And means that any rival bid from CD&R or other private equity rivals will need to up the stakes on every level.

Over to you Sir Terry.

[nerdlinger] 03/7/2021 17:36

As I understand it the timetable now is;

maximum 28 days from "2.7 Announcement" (RNS on Monday?) to the publication of the Scheme of Arrangement documentation

then minimum 21 days to shareholder meeting for 75% approval

then there's a court hearing leading to a Court Order finalising takeover, up to this point a counter offer can be made. Burges Salmon suggest a timeline of 18 days between shareholder meeting and Court Order but this appears to be unspecified in the rules.

See page 12:



It could go on for a while if there are late counter bids or if the shareholders vote against or combinations and multiples of both. £2.54 is hardly a knockout bid so I'm not researching my investment of the proceeds just yet.